The federal government has announced that it will not implement the recommendations of the CITT (Canadian International Trade Tribunal) to impose surtaxes of up to 30% on imported bicycles with an FOB price on or below $225 Canadian. The recommendations were proposed after domestic manufacturers Procycle and Raleigh stated that they were facing undue hardship and lost of sales from imports.

"This is excellent news for the bike industry and specifically the Independent Bike Dealers across Canada. BTAC is committed to reducing taxes on bikes and our efforts in this area will continue" stated Janet O'Connell, BTAC Executive Director (Bicycle Trade Association of Canada).

The full text of the release:

Minister of Finance Jim Flaherty and Minister of International Trade David Emerson today (May 29, 2006) announced that the Government of Canada will not impose special trade restrictions on imports of bicycles and barbeques.

"After considering all of the information, it was determined that temporary protective tariffs simply wouldn't provide a competitive long-term solution in these two cases," said Minister Flaherty. "We want to grow and strengthen our economy, and imposing these surtaxes would have increased costs for both Canadian retailers and consumers."

"The Government of Canada recognizes that many Canadian manufacturers are adjusting to fast-changing global realities," added Minister Emerson. "We will continue to work closely with the private sector to develop trade strategies that will maximize the benefits of Canada's role in global supply chains."

Today's decisions address two reports released last year by the CITT, a quasi-judicial body responsible for conducting inquiries into complaints by Canadian manufacturers that increased imports are causing, or threatening to cause, injury to the domestic producers of directly competitive goods.

Bicycles are already subject to a high rate of tariff protection, and in the case of barbeques this surtax would likely result in low-cost products being imported from countries other than China.

"Our government believes there is a better way," said Minister Flaherty. "To ensure Canada remains competitive in the global marketplace, we are reducing taxes and providing additional support for education and the skilled trades. These tax measures include lowering the GST as well as small business and other corporate taxes, and providing tax credits to encourage apprenticeships."

In all safeguard cases, the decision as to whether to impose border measures on the basis of a report from the CITT rests with the Government of Canada. Any decision to impose measures on imports is based not only on the CITT's report, but also on an assessment of whether these special measures would promote the long-term viability of the domestic producers seeking protection, as well as the potential effects on other Canadian interests.